Newspaper article The Evening Standard (London, England)
How Long until Nine Wise Men Raise Rates? Sorting the Hawks from the Doves on the Bank of England's MPC ECONOMIC ANALYSIS
Byline: Hugo Duncan
ANDREW Sentance must be feeling pretty lonely. The Bank of England's hawk-in-chief has broken ranks and started voting for higher interest rates.
He argued for change in June and July but was outnumbered by the rest of the Monetary Policy Committee. He will no doubt vote again for a rate hike on Thursday. Sentance reckons high inflation is more of a worry than muted economic growth.
The others disagree. For now. The fear is that other members of the MPC will join Sentance sooner rather than later and raise rates from the record low of 0.5%. This could be very painful indeed -- maybe not for savers, but definitely for millions of borrowers. Low interest rates will be vital in cushioning the blow of austerity measures imposed by the Government. These nine men at the Old Lady of Threadneedle Street (there are no women left on the MPC) hold the key to Britain's economic future: MERVYN KING The Governor was for a long time seen as a hawk. That was before the financial crisis and global recession. He is now seen as something of a dove, well aware that low rates and plenty of freshly printed money is needed to offset spending cuts and tax rises. Last week King told MPs: "There will come a point when we will certainly need to ease off the accelerator and return Bank Rate to more normal levels. I look forward to that time. But I fear there is some considerable distance to travel before we can begin to use the word normal." Hawk rating (1 is the most dovish and 5 the most hawkish): 2 CHARLIE BEAN The deputy Governor has said little in recent months to shed his dovish reputation. He admits that inflation -- presently at 3.2% -- is higher than he'd like and that it must return to the 2% target. But Bean seems happy enough, for now at least, to leave rates unchanged and is unlikely to join Sentance any time soon.
Hawk rating: 2 PAUL TUCKER A key swing voter. When Tucker decides it is time for rates to rise, there is a good chance they will. However, there is little to suggest that he is ready to vote for such an increase just yet. As deputy Governor in charge of financial stability, he has warned that interest rates must stay low to compensate for strains in the banking system. Hawk rating: 3 SPENCER DALE The Bank's chief economist has been more hawkish than others since the recovery got underway. …